WORLD TRADE  
ORGANIZATION   
WT/DS436/3 
13 July 2012  
 
(12-3824) 
 Original:   English 
  
 
UNITED STATES – COUNTERVAILING MEASURES ON CERTAIN 
HOT-ROLLED CARBON STEEL FL AT PRODUCTS FROM INDIA 
 
Request for the Establishment of a Panel by India 
 
 
 The following communication, dated 12 July 2012, from the delegation of India to the Chairperson of the Dispute Settlement Body, is ci rculated pursuant to Article 6.2 of the DSU. 
 
_______________ 
 
 1. On 24 April 2012 India requested consultatio ns with the United States of America 
("United States"), pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  (the "DSU"), Article XXII: 1 of the General Agreement on 
Tariffs and Trade 1994 (the "GATT 1994") and Article 30 of the Agreement on Subsidies and 
Countervailing Measures  (the "ASCM"), with regard to the imposition of countervailing duties on 
Certain Hot Rolled Carbon Steel Flat Products fro m India ("subject goods") by the United States.  
2. Consultations were held on 31 May and 1 June  2012. Unfortunately, the consultations were 
unsuccessful in resolving the dispute. Therefore, I ndia respectfully requests, pursuant to Articles 4.7 
and 6 of the DSU and Article 30 of the ASCM, that  the Dispute Settlement Body ("DSB") establish a 
Panel to examine this matter, with the standard term s of reference, as set forth in Article 7.1 of the 
DSU.  
Measures at Issue: 
 
3. The United States conducted a counterva iling duty (the "CVD") investigation 
(No. C-533-821) and levied countervailing duti es on the subject goods. The provisional measures 
were imposed with effect from 20 April 2001 and th e final measures were imposed with effect from 
3 December 2001. The United States concluded a sunset review in 2007 and continued the duties for a further period of five years. The United States also conducted several Administrative Reviews (the 
"AR") to determine the CVD rate/s to be applied on the imports made during the relevant AR period. 
The measures continue to be in force. This request covers the countervailing duties applied on the 
subject goods by the United States from time to time . A non-exhaustive list of determinations, orders, 
etc. issued by the United States in Case No. C-533-821 is enclosed as Annex 1.  
4. The measures covered in this request also  include the following provisions of the 
United States Tariff Act, 1930 as codified in the Unit ed States Code, Title 19, Chapter 4, Subtitle IV 
("19 USC") and the United States Code of Federa l Regulations, Title 19, Volume 3, Chapter III, 
Part 351 ("19 CFR 351"): 
 (a) 19 CFR § 351.511(a)(2)(i) to (iii); 
  (b) 19 CFR § 351.511(a)(2)(iv); WT/DS436/3 
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 (c) 19 USC § 1677(7)(G);    (d) 19 USC § 1675a(a)(7);   
 (e) 19 USC § 1675b(e)(2); 
  (f) 19 USC § 1677e (b); and   (g) 19 CFR § 351.308 
 
5. The request also covers all the amendments, replacements, implementing acts or any other 
related measure in connection with the measures referred herein.  
Legal Basis 
 
A. "As such" claims  
6. In terms of the provisions contained in 19 CFR § 351.511(a)(2)(i) to (iii), the United States 
follows a three-tiered benchmark approach in de termining the adequacy of remuneration for the 
provision of goods or services by the Government. Under Tier-I, the United States considers market determined price resulting from actual transactions  in the country in question referred to as 
'in-country' prices. If the Tier-I price is not availa ble, the United States considers the world market 
price (Tier-II), provided it is reas onable to conclude that such pri ce would be available to purchasers 
in the country in question. If the Tier-II price is also not available, the United States will measure the 
adequacy of remuneration by assessing whether the government price is consistent with market 
principles. Under these provisions, the United Stat es examines whether the Government price in 
question is in accordance with market principles only when no benchmark is available under either 
Tier I or Tier II. The above mentioned provisions of the United States law relegates the prices, which are consistent with  market principles as per Ti er III, below the benchmark prices determined under 
either Tier I or Tier II, while measuring the adequacy of remuneration.   
7. Further, the benchmark prices under either Tier-I or Tier-II are mandatorily adjusted to reflect 
the price that a firm actually paid or would pay if it had imported the product. This adjustment will 
include delivery charges and import duties. The relevant provision is contained in 
19 CFR § 351.511(a)(2)(iv). Even if the government price is at ex-factory level, ocean freight, delivery charges and import duties are included in the be nchmark price to arrive at delivered prices. In 
measuring the adequacy of remuneration for the provis ion of goods, it is inappropriate to mandatorily 
include delivery charges and import duties. This prac tice also results in a higher subsidy margin and 
as a consequence, an excessive rate of countervailing duty.  
8. The United States laws contained in 19 USC § 1677(7)(G), 19 USC § 1675a(a)(7), and 
19 USC § 1675b(e)(2) provide that the US Intern ational Trade Commission shall cumulatively assess 
the volume and effect of the subject merchandi se from all countries with respect to which: 
(a) petitions seeking imposition of either an antidum ping or a countervailing duty were filed on the 
same day, (b) antidumping or countervailing duty inv estigations were initiated on the same day; or 
(c) when both (a) and (b) are satisfied. These provisions permit cumulation of imports from countries 
that are not subject to simultaneous countervailing duty investigations.  
9. The United States laws contained in 19 USC § 1677e (b) and the implementing regulations 
contained in 19 CFR § 351.308 provide for the use of 'adverse facts available' standards in making determinations in both antidumpi ng and countervailing duty investig ations. Under the 'adverse facts 
available' standard, an adverse inference may be drawn by selecting  from among the facts otherwise  WT/DS436/3 
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  available. In other words, the inves tigating authority need not consider all the facts available and it is 
sufficient for the authority to consider one or more facts from among all the facts available to draw an 
adverse inference. The ASCM does not provide for the use of 'adverse facts available' standard. 
10. India considers that the aforesaid provisions of  the US laws are inconsistent with the 
United States' obligations under the Articles 12, 14, 15, 19 and 32 of the ASCM and Article XVI:4 of 
the Marrakesh Agreement Establishing the Wo rld Trade Organization as described below: 
 (a) The provisions contained in 19 CFR § 351.511(a)(2)(i) to (iii) are 'as such' 
inconsistent with Article 14(d) of the AS CM because they mandate a hierarchical 
approach in which an evaluation of whethe r the government price in question is in 
accordance with market principles is not made in every case but only in a case where 
both Tier I and Tier II benchmarks are not available.  
  (b) The provision contained in 19 CFR § 351.511( a)(2)(iv) is inconsistent 'as such' with 
Article 14(d) of the ASCM because it mandat es the use of 'deliver ed prices' in every 
case, disregarding the prevailing market conditions for the goods in question in the 
country of provision. 
  (c) The provision contained in 19 CFR § 351.511( a)(2)(iv) is inconsistent 'as such' with 
Articles 19.3 and 19.4 of the ASCM because th e use of 'delivered prices' in every 
case leads to an excessive subsidy margin and consequently, an inappropriate amount 
of duty, in excess of the amount of actual subsidy, if any.  
 
 (d) The provisions contained in 19 USC § 1677(7)(G), 19 USC § 1675a(a)(7), and 
19 USC § 1675b(e)(2) are "as such" inconsistent with Article 15.3 of the ASCM because they mandate cumulation of imports from countries not subject to simultaneous countervailing duty investigations  and consequently, are also "as such" 
inconsistent with Articles 15.1, 15.2, 15.4 and 15.5 of the ASCM.  
  (e) The provisions contained in 19 USC § 1677e (b) and the implementing regulations 
contained in 19 CFR § 351.308 are "as such " inconsistent with Article 12.7 of the 
ASCM because they provide for the use of "adverse facts available" in countervailing 
duty investigations. 
 
11. To the extent the United States Code and the Code of Federal Regula tions mentioned above 
are inconsistent with the provisions of the ASCM, the United States is violating Article 32.5 of the 
ASCM as well as Article XVI:4 of the Marrak esh Agreement Establishing the World Trade 
Organization. 
B. "As applied" claims 
 
12. India considers that the determinations ma de, and the countervailing measures imposed, by 
the United States are inconsistent with Articles 1,  2, 10, 11, 12, 13, 14, 15, 19, 21 and 22 of the 
ASCM and, at a minimum, with the followi ng obligations under the covered agreements: 
(a) In connection with the alleged provision of High Grade Iron Ore for Less Than Adequate 
Remuneration –  
 
 (i) Articles 1.1(a)(1) of the ASCM –    1. Because the National Mineral Deve lopment Corporation Limited (NMDC) is 
not "government" or a "public body". WT/DS436/3 
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 2. Because the sale of iron ore by the NMDC did not amount to financial 
contribution by the Government of India. 
  (ii) Articles 1.1(a)(1) of the ASCM, in view of the absence of a valid determination that 
the NMDC is "government" or a "public  body" and the failure to make a 
determination that the Government "entrust s or directs" NMDC to provide high grade 
iron ore to producers of the subject goods. 
  (iii) Article 1.1(b) of the ASCM, in view of the failure to establish that the sale of iron ore 
by the NMDC to producers of subject goods conferred a benefit.  
  (iv) Article 2.1(c) of the ASCM, because the sale of iron ore by the NMDC is not de facto  
specific and the determination has been ma de without considering all the mandatory 
factors listed therein, in particular, the exte nt of diversification of economic activities 
within the jurisdiction of the granting authority, as well as the length of time during 
which the subsidy program h as been in operation.  
  (v) Article 2.4 of the ASCM, in view of the failure to substantiate the determination of 
specificity on the basis of positive evidence. 
 
 (vi) Article 14(d) of the ASCM –  
   1. Because the adequacy of remunera tion for the provision of iron ore was 
determined by reference to a benchm ark price, without first examining 
whether the NMDC price itself was adequate. 
 
 2. Because the adoption of the deliver ed price as benchmark disregarded the 
prevailing market conditions for sale of iron ore in India. 
   3. Because the adequacy of remunerati on was not determined in relation to the 
prevailing market conditions for sale of iron ore in India. 
 
  4. Because the export prices of the NM DC were rejected in determining the 
adequacy of remuneration. 
   5. Because of the use of an 'out of c ountry' benchmark even when an 'in country' 
benchmark was available, while determ ining the adequacy of remuneration. 
  (vii) Articles 19.3 and 19.4 of the ASCM, b ecause the determination leads to an excess 
amount of subsidy, if any, and an inappropriate amount of duty. 
 
(b) In connection with the Captive Mining of Iron Ore 
 
 (i) Article 12.5 of the ASCM, because the United States, based on the evidence on 
record, could not have satisfied itself as to  the existence of a "captive" mining rights 
program and a separate set of regulations therefor. 
 
 (ii) Article 1.1(a)(1)(iii) of the ASCM, because the grant of 'mining rights' does not 
amount to financial contribution by way of provision of goods. 
  (iii) Article 1.1(b) of the ASCM, in view of the failure to establish that grant of mining 
rights conferred a 'benefit'.   WT/DS436/3 
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 (iv) Article 2.1(c) of the ASCM, because the grant of mining rights of iron ore is not 
de facto  specific to just steel producers and th e determination has been made without 
considering all the mandatory factors listed therein, in particular, the extent of 
diversification of economic ac tivities within the jurisdiction of the granting authority, 
as well as the length of time during which the subsidy program has been in operation. 
  (v) Article 2.4 of the ASCM, in view of the failure to substantiate the determination of 
specificity on the basis of positive evidence. 
 
 (vi) Article 14(d) of the ASCM –  
   1. In view of the failure to determine whether the remuneration for the grant of 
mining rights was adequate. 
 
  2. Because the adequacy of remuneration was not determined in relation to 
prevailing market conditions for the iron ore in question, in India.  
   3. Because the prices of the NMDC were  rejected in determining the adequacy 
of remuneration. 
 
  4. Because of the use of an 'out of c ountry' benchmark even when an 'in country' 
benchmark was available wh ile determining the adequacy of remuneration. 
 
(vii) Articles 19.3 and 19.4 of the ASCM, becau se the determination leads to an excess 
amount of subsidy, if any, and an inappropriate amount of duty. 
 
(c) In connection with the Captive Mining of Coal 
 
 (i) Article 1.1(a)(1)(iii) of the ASCM, because the grant of 'mining rights' does not 
amount to financial contribution by way of provision of goods. 
 
(ii) Article 1.1 (b) of the ASCM, because of th e failure to establish that grant of mining 
rights conferred a benefit.  
  (iii) Articles 2.1(a) and (b) of the ASCM, because the grant of captive mining rights for 
coal was based on objective criteria and conditions.  
 
 (iv) Article 14(d) of the ASCM –     1. In view of the failure to determine whether the remuneration for the grant of 
mining rights was adequate. 
 
  2. Because the adequacy of remuneration was not determined in relation to 
prevailing market conditions for th e coal in question, in India. 
  (v) Articles 19.3 and 19.4 of the ASCM, becau se the determination leads to an excess 
amount of subsidy, if any, and an inappropriate amount of duty. 
 WT/DS436/3 
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  (d) In connection with the operations of the Steel Development Fund (SDF) 
 
 (i) Article 1.1(a)(1) of the ASCM –     1. Because the Joint Plant Committee (JPC) is not 'government' or a 'public 
body'. 
   2. Because the grant of loans from the SDF is not a government practice that 
involves the direct transfer of funds, or potential direct transfer of funds, to steel producers. 
 
 (ii) Articles 1.1(a)(1) of the ASCM, in view of the absence of a valid determination that 
JPC is "government" or a "public body" and th e failure to make a determination that – 
   1. The SDF involves the Government making payments to a funding 
mechanism. 
   2. The Government "entrusts or direct s" the JPC to establish and operate the 
SDF. 
  (iii) Article 1.1(b) of the ASCM, because th e SDF program did not confer a benefit on the 
participating steel producers.  
  (iv) Article 14 of the ASCM –     1. In view of the failure to determine th e net benefit, if any, i.e., after adjusting 
the costs incurred by the exporters in or der to participate in the SDF program. 
   2. Because the benchmark adopted di d not represent the rate applicable for 
comparable commercial loans.  
   3. Because the application of the releva nt United States' laws and regulations is 
not transparent and adequately explained. 
  (v) Articles 19.3 and 19.4 of the ASCM, becau se the determination leads to an excess 
amount of subsidy, if any, and an inappropriate amount of duty. 
 
 (vi) Article I of the GATT, in view of the inconsistent and discrim inatory determinations 
in respect of similar programs, i.e., funds from producer levies. 
 
(e) In connection with the injury determination –  
 
 (i) Article 15.3 of the ASCM, because imports from 11 countries have been cumulated, 
of which six countries are not subject to simultaneous CVD investigation. 
  (ii) Articles 15.1 and 15.2 of the AS CM, because both subsidized imports and non-
subsidized imports have been consider ed together in determining injury.  
 
 (iii) Articles 15.1 and 15.4 of the ASCM –  
  1. Because both subsidized imports and non-subsidized imports have been 
considered together while examining th e impact of subsidized imports on the 
domestic industry.  WT/DS436/3 
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  2. In view of the failure to consider all the mandatory economic factors, in 
particular, growth, return on investme nt and ability to raise capital or 
investment. 
 
 (iv) Article 15.5 of the ASCM, because both subsidized imports and non-subsidized 
imports have been considered together while demonstrating the causal relationship 
between subsidized imports and injury to the domestic industry.  
 
(f) In connection with other issues 
 
 (i) Article 11 of the ASCM because no inv estigation was initiated or conducted to 
determine the effects of new subsidies included in the administrative reviews.  
  (ii) Articles 13.1 and 13.2 of the ASCM, in view of the failure to invite India for 
consultations before including New Subs idy Allegations within the scope of 
Administrative Reviews. 
  (iii) Article 21 of the ASCM, because le vying countervailing duties in respect of new 
subsidies does not amount to reviewing the need for continuation of the existing countervailing duties. 
 
 (iv) Article 22.1 and 22.2 of the ASCM, in view of the failure to issue a public notice 
regarding initiation of investigation in to the alleged new subsidy programs. 
  (v) Article 12.7 of the ASCM, in view of the punitive application of the 'adverse facts 
available' standard while dete rmining the subsidy margins. 
 13. India considers that the measures, 'as applied', are inconsistent with Articles 22.3 and 22.5 of 
the ASCM because the determinations of the United States do not set forth, in sufficient detail, the 
findings and conclusions on the material issues of facts and law, all releva nt information on the 
matters of fact and law, reasons for the various findings, as well as reasons for acceptance or rejection 
of relevant arguments or claims raised by the interested parties. 
14. As a consequence of the inconsistencies menti oned above, the counterva iling duties applied in 
this case are inconsistent with Articles 10 and 32.1  of the ASCM and Article VI of the GATT 1994.  
15. India further considers that the measures at issu e have a serious adverse impact on the export 
of subject goods from India to the United States. Furt her, India considers that the measures at issue 
cause nullification or impairment of benefits accruing to India under all the aforesaid cited 
agreements.   
16. India hereby requests that this request for the establishment of a Panel be placed on the 
agenda of the DSB meeting to be held on 23 July 2012. 
 WT/DS436/3 
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  Annex 1 
 
 Original Investigation  
 1. Preliminary Affirmative Countervailing Du ty Determination and Alignment of Final 
Countervailing Determination With Fina l Antidumping Duty Determinations:  Certain 
Hot-Rolled Carbon Steel Flat Products From India :, 66 FR 20240-01, 
April 20, 2001. 
 
 2. Issues and Decision Memorandum – Final Results of the Countervailing Duty 
Investigations: Certain Hot-Rolled Carbon Steel Flat Products From India , 
66 ITADOC 49635, September 21, 2001. 
  3. Final Affirmative Counter vailing Duty Determination: Certain Hot-Rolled Carbon 
Steel Flat Products From India , 66 FR 49635-01, September 28, 2001.  
  4. Injury Determination:  Hot Rolled Steel Products from China, India, Indonesia, 
Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and Ukraine , 
701-TA-405-408 and 731-TA-899-904 and 906-908, Pub. 3468, United States International Trade Commission, November 2001.  
 
 5. Amended Final Results of Countervailing Duty Orders : Certain Hot-Rolled Carbon 
Steel Flat Products From India and Indonesia , 66 FR 60198-01, December 3, 2001.  
  6. Countervailing Duty Order in the Investigation: Certain  Hot Rolled Carbon Steel Flat 
Products from India , January 8, 2002.  
 Administrative Review: POR April 20, 2001 through December 31, 2002   7. Preliminary Results of Countervailin g Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from India, 69 FR 907-01, January 7, 2004. 
 
 8. Issues and Decision Memorandum – Final Results of the Countervailing Duty 
Investigation: Certain Hot-Rolled Car bon Steel Flat Products From India, 
69 ITADOC 26549, May 6, 2004. 
 
9. Final Results of Countervailing Duty Administrative Review: Certain Hot-Rolled 
Carbon Steel Flat Products from India, 69 FR 26549-01, May 13, 2004. 
 Administrative Review: POR January 1, 2004 through December 31, 2004   10. Preliminary Results of Countervailin g Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from India, 71 FR 1512-01, January 10, 2006. 
  11. Issues and Decision Memorandum – Final Results of Administrative Review of the 
Countervailing Duty Order : Certain Hot- Rolled Carbon Steel Flat Products from 
India, 71 ITADOC 28665, May 10, 2006. 
 
 12. Final Results of Countervailing Duty Administrative Review: Certain Hot-rolled 
Carbon Steel Flat Products from India, 71 FR 28665-01, May 17, 2006. 
  WT/DS436/3 
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  Sunset Review 
  13. Issues and Decision Memorandum – Final Results of Expedited Sunset Reviews of 
the Countervailing Duty Orders: Certain Hot-Rolled Carbon Steel Flat Products from Argentina, India, Indonesia, South Africa, and Thailand, 71 ITADOC 70960, 
December 7, 2006. 
  14. Final Results of the Expedited Five -Year (Sunset) Reviews of the Countervailing 
Duty Orders: Certain Hot-Rolled Carbon Steel  Flat Products from Argentina, India, 
Indonesia, South Africa, and Thailand, 71 FR 70960-03, December 7, 2006. 
 
 15. Injury Determination – Hot Rolled Steel  Products from China, India, Indonesia, 
Kazakhstan, Argentina, Romania, South Africa, Taiwan, Thailand, and Ukraine, 
701-TA-404-408 and 731-TA-898-902 and 904-908(Review), Pub. 3956, United States International Trade Commission, October 2007. 
 
 16. Continuation of Antidumping Duty a nd Countervailing Duty Orders – Certain 
Hot-Rolled Carbon Steel Flat Products from India, Indonesia, the People's Republic of China, Taiwan, Thailand, and Ukraine, 72 FR 73316-03, December 27, 2007. 
 Administrative Review: POR January 1, 2006 through December 31, 2006 
 
 17. Preliminary Results of Countervailin g Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from India, 73 FR 1578-02, January 9, 2008. 
  18. Issues and Decision Memorandum – Final Results of Countervailing Duty 
Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products From India, 
73 ITADOC 40295, July 7, 2008. 
  19. Final Results of Countervailing Duty Administrative Review: Certain Hot-Rolled 
Carbon Steel Flat Products From India, 73 FR 40295-02, July 14, 2008. 
 
Administrative Review: POR January 1, 2007 through December 31, 2007 
  20. Preliminary Results of Countervailin g Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from India, 73 FR 79791-01, December 30, 2008. 
 
 21. Issues and Decision Memorandum – Final Results of Countervailing Duty 
Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products from India, 
74 ITADOC 20923, April 29, 2009. 
  22. Final Results of Countervailing Duty Administrative Review: Certain Hot-Rolled 
Carbon Steel Flat Products from India, 74 FR 20923-01 May 6, 2009. 
 Administrative Review: POR January 1, 2008 through December 31, 2008   23. Preliminary Results of Countervailin g Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from India, 75 FR 1496-01, January 11, 2010. 
  24. Issues and Decision Memorandum – Final Results of Countervailing Duty 
Administrative Review: Certain Hot Rolled Carbon Steel Flat Products from India, 75 ITADOC 43488, July 19, 2010. WT/DS436/3 
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 25. Final Results of Countervailing Duty Administrative Review – Certain Hot Rolled 
Carbon Steel Flat Products from India, 75 FR 43488-01, July 26, 2010. 
 The request also covers all the amendments, repl acements, implementing acts or any other related 
measure in connection with the measures referred above.  
 
__________